Italian bank boss resigns over Libyan money row

Alessandro Profumo

The head of Italy’s biggest bank Unicredit, Alessandro Profumo, was forced to resign in a row with shareholders over the influx of Libyan money in the company’s capital.

“There was a demand made by the board of directors and he resigned,” his wife Sabina Ratti was quoted as saying late Tuesday by the news agencies Ansa and Radiocor after an emergency board meeting convened to discuss the row.

The bank issued a statement after the four-hour meeting, saying the “board had taken the position … that the time for a change of the head of the group has come,” adding: “Alessandro Profumo therefore handed in his resignation.”

It said Unicredit chairman Dieter Rampl would take charge until a replacement was found “in the coming weeks.”

The spat had pitted some of the bank’s Italian and German shareholders against Profumo.

Profumo has been chief executive since 1997 and has overseen a major international expansion drive by the bank, particularly into central and eastern Europe. In 2005, the bank merged with German lender HVB.

He is also president of the European Banking Federation in Brussels.

Profumo could get a package of 40 million euros (53 million dollars), Italy’s Ansa news agency said but the bank did not confirm the figure.

The stakes in Unicredit held by the Libyan central bank and the Libyan Investment Authority have risen this year to a total of more than 7.5 percent, making the Libyan state the largest single shareholder in the bank.

This has stoked anger among some other shareholders, who have accused Profumo of failing to inform them of these developments, the reports said.

Tensions were already simmering because of the bank’s poor earnings, with net profit last year plunging 57.6 percent to 1.702 billion euros.

Shares in Unicredit were down 2.11 percent on the Milan stock exchange at the close of trading, while the benchmark FTSE Mib index slipped 0.06 percent.

Unicredit is one of the biggest banks in Europe. It has a market capitalisation of 37.3 billion euros and around 162,000 employees with branches in 22 countries.

Shareholders include several Italian bank foundations, German insurance giant Allianz and the Aabar Fund from Abu Dhabi.

Source: AFP

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